The figure given below shows the revenue and the cost curves of a perfectly competitive firm. Figure 23.3 In Figure 23.3, the firm will have to suspend its operations if the price falls below _____.

Question

The figure given below shows the revenue and the cost curves of a perfectly competitive firm. Figure 23.3  In Figure 23.3, the firm will have to suspend its operations if the price falls below _____.

Quizplus · Accepted Answer

The firm will have to suspend its operations if the price falls below the minimum of the AVC curve. From the graph, we can see that the minimum of the AVC curve is at $4, therefore the firm will have to suspend its operations if the price falls below $4.

The Figure Given Below Shows the Revenue and the Cost